New energy reform bills pending in the Michigan Legislature would establish mechanisms to reunify mineral rights with surface property, provide safeguards for mineral owners who sign oil and gas leases, and add new protections for environmentally sensitive state-owned lands.

The state Legislature appears ready to enact substantive policy reforms in 1998 to strengthen oversight of the oil and gas industry.

In December, as the state House of Representatives ended a legislative session filled with debate on oil and gas issues, lawmakers unanimously approved eight reform measures and sent them on to the Senate. The legislation would establish mechanisms to reunify mineral rights with surface property, provide safeguards for mineral owners who sign oil and gas leases, and add new protections for environmentally sensitive state- owned lands.

These bills came out of the new House Forestry and Mineral Rights Committee, chaired by Rep. David Anthony (D-Escanaba). The Committee began its review by traveling to Gaylord last fall to hear from more than 200 citizens calling for improvements in state oil and gas policy.

The Senate Committee on Technology and Energy is expected to hold hearings on the bills in February, according to Committee Vice-Chair Sen. Bill Schuette (R-Midland).

The most significant proposal in the package is House Bill 4061, sponsored by Rep. Bill Bobier (R- Hesperia), which attempts to reunify mineral rights with surface rights when the state owns one but not the other. The bill would require the state to sell mineral rights it owns to the surface owner. Once the minerals are re-united, a deed restriction would be placed on the property to restrict separation of the minerals in the future. The money from these sales would be used to acquire private minerals beneath state-owned surface lands.

Staff members from the Institute testified at a hearing in Lansing in support of the unification of severed mineral rights, and recommended that the policy needs to go further. In environmentally-sensitive areas, where it is in the public interest to retain the mineral rights, the state should hold onto them and solve conflicts with surface owners by adopting a policy not to drill on private land.

The Institute also supports additional changes in state policy to bring greater fairness to surface owners. Rep. Liz Brater (D-Ann Arbor) has made a start in that direction by introducing legislation that would give surface owners a chance to arbitrate disputes with oil companies before wells are permitted. This bill will be evaluated by the House Forestry and Mineral Rights Committee in January.



For a fact sheet that includes a summary of each bill and contact information for key member of the House and Senate, call Hans Voss at the Institute: 616-882-4723.

Progress Continues Toward Keeping the Jordan Valley Off-Limits to Industry
Organizers to Citizens: Keep Speaking Out!

The Michigan Public Service Commission (PSC) and the Department of Environmental Quality have taken important steps to block Walter Zaremba's attempt to drill the first Antrim gas well in the protected Jordan River Valley.

On December 12, 1997, James N. Rigas, the Administrative Law Judge presiding over the PSC case, formally recommended denying Mr. Zaremba's application to build a pipeline from his proposed well across state land. The final decision will be made by the three Governor-appointed Commissioners early in 1998. According to the PSC staff, it is rare for the Commissioners to go against a recommendation from the Administrative Law Judge.

In his written ruling, Judge Rigas asserted that the "pipeline will have significant adverse impact on the Jordan Valley Management Area and the natural, historical, and recreational values of the area."

The decision made special note of the seventy-five citizens who turned out to oppose the application at a public hearing in Bellaire last September.

"The writer is persuaded that significant weight should be accorded this expression of public sentiment," Judge Rigas wrote, "since it originated with those most directly affected."

Meanwhile, DEQ Director Russell Harding is backing his staff's decision to deny Mr. Zaremba a permit to drill. In a letter to Mr. Zaremba's attorney, Mr. Harding rejected the developer's appeal, and defended his agency's authority to deny the permit in order to fulfill the state's legal obligation to "prevent waste."

Mr. Harding added, however, that Mr. Zaremba could submit another drilling permit application if he gains PSC approval for the pipeline.

The 22,000-acre Jordan Valley natural area, located in Antrim and Charlevoix counties, has been protected from industrial development since 1975 under a special Department of Natural Resources Management Plan.


TO COMMENT ON THE PIPELINE APPLICATION, CONTACT: Dorothy Wideman, Executive Secretary, MPSC, P.O. Box 30221, Lansing, MI 48909, Tel. 517-334-6370.

FOR MORE INFORMATION, CONTACT: Hans Voss at the Institute,231-882-4723; John Hummer, Friends of the Jordan River Watershed,231-533-5063.